May 13

13

Speculation and a nickel won’t buy a cup of coffee

Posted by Joyce Clark on May 13, 2013
Posted in City of Glendale | Tagged With: Gosbee, LeBlanc, NHL, owneship, Pastor, Phoenix Coyotes | 6 Comments

I have been following all of the public speculation since the Renaissance group (LeBlanc/Gosbee) and the Pastor group have submitted bids to the NHL. There are some opining right this minute on which bid is better. How can anyone possibly know? There is only one entity, the NHL, that has the complete package of information and they’re not telling. It is interesting, when you think about it, that neither bid has been blessed by the NHL to date. If either bid was that spectacular trumpets would be blaring. I suspect there are a few more bidders out there. Why declare a winner when all of the contestants haven’t signed in yet? Information is leaking slowly like a punctured tire but only the positive stuff that the groups believe will advance their bid before the public eye. That’s not the eye with which they should concern themselves. The Pastor group’s blitz with the media and fans may have earned them a few new friends but not the ones that count.

Until such time as we can see whom the NHL blesses and the kind of deal it is I, like everyone else, will just have to wait it out. Some of you will relate to this analogy. It’s like being pregnant. Your due date is June 1. You’re in the home stretch. You’re tired of being miserable and you just wish this baby would get on with it, quit fooling around and be born. I know the fans are stretched thin and are just wishing this baby would be born. Until then speculation is about as good as using a Ouija board.

Post Script: Just learned NHL rejected Pastor bid. This makes the case that speculation is useless. NHL has their own agenda and will accept a bidder that most closely meets that agenda. Do you know what the NHL’s agenda is? If so, would you please share it with all of us?

May 13

7

Rumors are born, grow and die within hours

Posted by Joyce Clark on May 7, 2013
Posted in Jobing.com arena | Tagged With: arena management fee, City of Glendale, finances, Glendale City Council, jobing.com arena, Phoenix Coyotes | 4 Comments

On May 6, 2013 Dan Bickley posted a column on Arizona Central. Here is the link http://www.azcentral.com/insiders/danbickley/2013/05/06/coyotes-new-money-new-ownership-bid-new-problems/. It is entitled Coyotes: New money, new ownership bid, new problems. I typically do not read Mr. Bickley. He apparently is just as often wrong as he is correct in his reportage and now, as the Coyotes ownership saga comes to a head rumors are multiplying like rabbits and flying faster than a 747 jet.

NHL Commissioner
Gary Bettman

What I did find interesting was this, “But the league wasn’t at all happy with Monday’s front-page story in the Arizona Republic, which listed the true cost of running Jobing.com Arena at less than $6 million.” Well, no one should be happy. Yesterday I posted facts and figures in three separate blogs, Fuzzy Math, A Magical, Mystical Number and There’s an Elephant in the Room. The true cost of operating Jobing.com Arena annually is about $12M.

Everyone is touting LeBlanc/Gosbee as the front-runners for ownership. Let me remind you that they are only the first participants in the parade of would-be owners. That does not make them sure-fire, guaranteed owners. Other parade participants are standing in line, Pastor, Jamison, Hulsizer, Reinsdorf and Kaites. Whoever was scheduled to meet with the current council first would have received the tag, “ front-runner.” That is exactly what it appears LeBlanc wants to happen. He would like to be declared the de facto winner of the contest and chase his other competitors away forever.

Anthony LeBlanc

Bickley goes on to say, LeBlanc’s group – Renaissance Sports and Entertainment “…is committed to absorbing $40 million in losses over the first four years, with an out clause if the economics don’t improve.” If Bickley’s reportage is accurate, this is a cause for concern. In the last go-round when LeBlanc was part of Ice Edge they wanted to play 4 or 5 games in Canada. I assume it was to dip their toes in the waters of the Canadian market to see if it was to their liking. A 5 year out clause, if LeBlanc is successful, may portend the Coyotes’ future. If we see another bid to play some regular season games in Canada that action will tell us more than mere words.

All of this conjecture becomes moot if there is no majority on council to support an annual lease management fee in the range of $10M to $12M. To date, it appears that this council is fixated on a $6M number. It’s a bogus number as I stated in my blog, A Magical, Mystical Number. It was created out of thin air and because it has been publicly stated ad nauseam, it is treated as if it’s a real number based on fact. What continues to amuse if it weren’t so sad, is that the current council really believes they can find an arena manger willing to take $6M a year, cover all operating costs (which means they begin by losing somewhere in the neighborhood of $6M annually) and float the city a loan to cover necessary capital repairs and replacements. Amazing! Stay tuned…Glendale’s version of the Amazing Race is not over!

Apr 13

29

April 29 interview with NHL Deputy Commissioner Bill Daly

Posted by Joyce Clark on April 29, 2013
Posted in City of Glendale | Tagged With: Deputy Commissioner Bill Daly, NHL, ownership, Phoenix Coyotes, sale | 4 Comments

NHL Deputy
Commissioner
Bill Daly

Here is the verbatim transcript of an April 29, 2013 interview with Deputy NHL Commissioner Bill Daly regarding Coyotes’ ownership from Sportsnet.com. I do not know the names of the two gentlemen that anchored the show on Hockey Central. I will refer to one as Anchor 1 (A1) and the other as Anchor 2 (A2). I refer to Bill Daly as BD. The link for the video is http://www.sportsnet.ca/hockey/nhl/bill-daly-on-hc-noon/ . It starts at about the 8 minute mark and the Phoenix Coyotes discussion lasts for about 3 minutes. My commentary follows the remarks made.

A1: “Couple of things we have to get to…Phoenix. Are you any closer?”

BD: “Yep. Look, it’s still a work in progress. There’s still a lot of work to be done. Um, but it’s still something that we’re diligent about trying to complete.”

A1: “Is it safe to say it’s not going to be a deal that’s ideal for you but it will be the best case scenario to keep the team in Phoenix?”

BD: “If we can get it done.”

A1: “It’s something…”

BD: “Again, we’re still trying to get it done and there’s a big, a big question mark still out there. We still have to deal with the City of Glendale.

This is an understatement. In the city council’s budget workshop of April 26, 2013 the figure that will be used in the approved Fiscal Year 2013-14 budget is $6M annually. There is still considerable doubt that this figure will be acceptable to any prospective buyer of the team.

A2: “This big notion that the team is essentially almost given to these people and they’re allowed to give it back in three years time. Is there any truth?”

BD: “Well, they’ll buy it.”

A2: “Yeah, they’ll buy it for peanuts.”

BD: “No. They don’t have the ability to give it back.”

The idea that the team would be given back has never surfaced. The question unasked is what is the NHL’s position on relocation of the team?

A2: “So, is this team going to be in excess of $150M, sold for?”

BD: “Yes.”

A2: “It will be sold for?”

BD: “Yes.”

A1: “Is there a guarantee that they play in Phoenix next year?”

BD: “Uh, no. There’s no guarantees.”

A2: “If this deal is done would they be in Phoenix?”

BD: “Yes. I mean, again, and I should clarify this. I mean, there’s no doubt that we’re dealing with Mr. Gosbee and Mr. LeBlanc and trying to work through and get to a deal with them but there are other interested people who continue, we’re working with at the same time as well. Nobody has exclusivity here. Um, but obviously we’re getting close to having to make some decisions and sign some documentation and you know, we’ve got to work on it. I was on a conference call again last night. It’s something we’re working on”.

The rumor that LeBlanc/Gosbee has a deal sewn up is just that, a rumor perpetuated by Mr. LeBlanc. Mr. Daly indicates that the NHL is talking to various groups and there is no exclusivity for anyone.

A1: “Are you ahead of where you were a few years ago when it looked like Phoenix was going to Winnipeg? I mean that was all but done. Are you ahead of that pace or about the same?”

BD: “I’m not sure how I answer that question. I mean, the, uh, I think, uh, we were very close to selling this team a couple of times and some unforeseen circumstances, uh, kept it from happening. Uh, that’s why I’m the first person who can’t give any guarantees on any result here. Um, you know and at some point in time, you beat your head against the wall enough times you have to try a different hole. You know I used to be a running back. I used to beat my head against the line a couple of time and then I had to try a different hole.”

That “different hole” that Mr. Daly is referring to appears to be consummating a sale with the NHL and then presenting it to Glendale, to accept or reject.

A1: “What happens first? The Olympics or Phoenix? Resolved?”

BD: “Um, well, the final resolution? Uh, I think we’ll in a position to make a recommendation to our Board before, on the Olympics, you know, before we have a closed transaction in Phoenix. That’s not to say there could be some announcements saying this is what we’re trying to get done in Phoenix before then.”

It appears that the NHL still has a long way to go before any announcement of sale is made.

A2: “How much money has the League invested in Phoenix to this point? Like what would you have to sell that team for to break even? On what you’ve lost on this transaction?”

BD: “It’s a complicated question. I can probably take you through it and get to an answer.

A1: “The $25M a year from Glendale has helped.”

BD: “But I don’t intent to (referring to how much has been lost). Of course (in response to the $25M from Glendale).”

Glendale’s infusion of $25M annually for 2 years has virtually guaranteed that the NHL did not lose money in attempting to secure an owner.

Interview then moved on the Stanley Cup….

Apr 13

19

Through a former councilmember’s prism

Posted by Joyce Clark on April 19, 2013
Posted in Jobing.com arena | Tagged With: Beacon RFP, councilmembers, Glendale, Jobing.com, NHL, owners, Phoenix Coyotes | 5 Comments

The entire Coyotes ownership saga began with the Glendale city council’s decision to accept Steve Ellman’s proposal for a sports and entertainment district that included the construction of an arena for the express purpose of having the Coyotes as its anchor tenant. Their first game was played in the new arena in 2003. The original lease management agreement did not require a payment to the manager of the arena. That concept died with the Moyes’ bankruptcy in 2009. I was part of the drama until January 15, 2013 as a councilmember. I speak for myself and not for any Glendale elected officials, past or present.

During my 16 year service on Glendale City Council one of my imperatives was to make decisions that were fully informed. As a councilmember one does that by “doing one’s homework.” That means a commitment to read the material you are provided. Ascertain all of the facts of the proposal. Question staff by asking follow up questions on material not always presented. Talk to people in the industry and talk to the stakeholders, i.e., prospective developers and business owners, and last but certainly not least, one’s constituents by informing them of the facts of the proposal and asking for their comment. You take this vast amount of information and process it through a personal sieve. One overriding parameter is to make a decision that you believe to be in the very best interest of your city, economically and socially.

Just as all people are different so, too, are all councilmembers different. During my time on council, I have met some councilmembers who were lazy and didn’t bother to do their homework or who became wedded to a position immediately and would not budge and let facts get in the way. I have even observed some who let personal prejudice determine their position. I have also observed councilmembers who did, in fact, do their homework. Their final position may have been different from mine but that was because their personal framework of reference led them in a different direction. No matter, they earned my respect because they were not swayed by personal prejudice or preference.

I was first elected in 1992. I think I can be considered as a Councilmember Emeritus. There are very few of us still living much less living in Glendale. In fact, there are less than a dozen. There are former Mayors Renner and Scruggs, Councilmembers Heatwole, Tolby, McAllister (living out-of-state), Eggleston, Frate, Goulette, Lieberman (living out-of state) and myself. Former Councilmember Hugh is serving once again and former Mayor Klass and former Councilmember Huffman are deceased.

From that perspective one has to appreciate Glendale’s recent history. Prior to the 1980’s Glendale was an unremarkable town that offered residents a quiet, hometown quality of life. In the early 1990’s we had an opportunity to create the first major economic engine in the city – the Bell Road Corridor to be anchored by Arrowhead Mall. I was present for the signing of the beam that was used in the construction of Arrowhead Mall, the anchor tenant for the area. Glendale had its first major economic engine.

Glendale’s second major economic engine became its downtown in the mid 1990’s with the advent of its first, annual major festival, Glendale Glitters and its synergy as an antique center in the state. Since then, downtown commercial has diversified. It is still not all that anyone envisions it can be but it continues to make progress. Its major anchor tenant could be considered City Hall, the Civic Center and the investment the city continues to make in hosting major downtown events. Glendale has its second major economic engine.

Courtesy Christopher B.

In the early 2000’s another opportunity for a third major economic engine was created with the relocation of the Coyotes Hockey team and the construction of Jobing.com arena for the team. The national economy was humming and I and the rest of council were planning for Glendale’s future. The city created a new zoning classification, “Sports and Entertainment District” and Westgate was born. Nearly all of the land surrounding the original core of Westgate to date has been approved with the Sports and Entertainment zoning classification and with Westgate’s and the arena’s stability there will be a surge of development. I won’t relate the history of the arena and the team from 2003 to the present for that has been covered in my other postings.

Today uncertainty about Coyotes ownership and the fate of Jobing.com arena still swirls. Many have asked me for my personal assessment. There is the Beacon RFP and how it plays. There is the current crop of prospective owners: Jamison, LeBlanc/Gosbee, Pastor, Hulsizer and Reinsdorf/Kaites. Do not ignore the non-hockey bids to manage the arena: Global Spectrum, AEG and IFG. They cannot be discounted as players. I am not going to comment at this time and when I do it will be through the prism of what I, personally, believe is good for Glendale. There will be plenty of time to dissect the situation after decisions are made. It’s time to let this situation play out. I think the NHL has come to a decision and it would not surprise me to hear the announcement next week. That much is logical. Whomever the NHL has blessed must get a submission together to respond to the Beacon RFP by May 24. The finish line is in view and the winner is…?

Apr 13

12

Coyotes financial history

Posted by Joyce Clark on April 12, 2013
Posted in City of Glendale | Tagged With: finances, Gary Bettman, Jerry Moyes, jobing.com arena, Phoenix Coyotes, Steve Ellman | 3 Comments

Steve Ellman

Through a Request for Information processed by the City of Glendale, I obtained information about arena management company finances over the years. I do not have a complete picture but I do have information that relates to 2006 to 2007, during the time when Jerry Moyes was the majority owner of the team and arena manager, and 2010 to 2013, the time that the NHL has been owner of the team and arena manager. From the time the arena opened in 2003 to 2006, Steve Ellman was majority owner of the team and the arena manager. Records for his period of management are as elusive as the man himself. When the national economy went south the two men responsible for bringing the team to Glendale left it, holding the bag. Is it karma that Steve Ellman declared bankruptcy regarding Westgate and Jerry Moyes declared bankruptcy regarding the team?

Jerry Moyes

In 2006 to 2008 the arena was managed by the Arena Management Group, LLC (AMG), a Delaware Limited Liability Company. The managing member and 100% owner of AMG was Coyotes Holdings, LLC (CH) and Jerry Moyes was the majority owner of record. Moyes was originally a minority partner in Steve Ellman’s ownership group, which bought the Coyotes from Richard Burke in 2001. On September 26, 2006, Ellman sold controlling interest in the Coyotes, Arizona Sting, and the lease to Jobing.com Arena to Moyes. Independent Auditor’s Reports by BDO Seidman, LLP., an accountancy and consultancy firm, were produced that covered the period of 2006 and 2007, just prior to Moyes’ bankruptcy filing.

The auditor’s report shows the following :

2006 2007

Revenues $7,142,000 $6,499,000

Expenses:

Event $5,616,000 $4,413,000

General and Administrative $ 7,303,000 $ 9,052,000

Total expenses $12,919,000 $13,465,000

Net Loss ($5,777,000) ($6,966,000)

Balance as of June 30, 2005 Member’s Deficit ($9,641,000)

Net Loss ($5,777,000)

Balance as of June 30, 2006 Member’s Deficit ($15,418,000)

Net Loss ($6,966,000)

Balance as of June 30, 2007 Member’s Deficit ($22,384,000)

The managing member(s) had plowed over $22M to cover the losses incurred in 2006 and 2007. The general and administrative expenses appear to be disproportionately high during this period.

Gary Bettman

In 2008, Moyes told Gary Bettman that he would stop funding the club and so, the figures for 2008 were not included in this request. The NHL was willing to provide funding on an emergency basis if Moyes would turn over his voting control. Their divisiveness became public in May 2009 when the League nearly sold the Coyotes to Jerry Reinsdorf. Moyes would have received very little, if anything, from the sale. Moyes immediately put the Coyotes into bankruptcy protection and announced a plan to sell the club to Jim Basillie. Moyes also filed a lawsuit against the NHL, alleging the league was an “illegal cartel.” Bettman, in return, argued that the league had been blindsided and that Moyes did not have the authority to put the club into bankruptcy protection. Financial records for 2009, during this period of turmoil were not provided from the city.

In the 3 years in which the Arena Newco, LLC., (NHL) has been managing the arena, and according to the documents that they submitted to the city, the costs and revenues have been pretty consistent. Revenues average in the $6M to $7M range and expenses average about $12.5M. The Net Operating Loss average is about $5.5M.

If you look the Moyes figures and the NHL figures they are pretty close to one another. I think it is safe to assume that the costs of operating the arena with the team as an anchor tenant will be in the $12M to $13M range. Revenues have consistently been in the $6M to$7M range with an annual operating loss of about $5M to $6M. Keep in mind these figures do not create any Return on Investment for any of the 4 groups and their investors vying to acquire the team. If the city council rejects all of these potential buyers it is safe to assume that they will be looking an annual expenditures of about $8M to cover the construction debt payment and another $12M to operate the arena. Undoubtedly that $20M annual expenditure will be offset by sales taxes collected on revenue but they should not expect revenue to be comparable to the current $6M to $7M range.

There is another issue to be considered and that is , Capital Repairs. There is a Capital Replacement and Renewal Account from which to pay these items. How hefty is it? None of the documents are clear. But it is known that apparently the roof is leaking and may require as much as $2M to fix.

Revenues have been low for a variety of reasons. In 2003, the team was sited in a new geographical location and it took time for fans to adjust their mindset to make the drive to Glendale. Moyes and the NHL have not had a particularly strong track record in booking other events into the arena. In fact, this year saw the least number of non-hockey events booked than in any previous year. Of course, the first lockout and the most recent lockout did not help. Add to this the fact that the team has not had an owner since 2009 and we have had a referendum attempt to get rid of the team and an election to void the sales tax increase. Throw into all of this mix, a national economy that took a nose dive. This team and this location have never had a fighting chance to realize its full potential.

My hat is off to all of the potential buying groups for believing that they have solutions to all of these issues and can turn the profitability picture around. No matter who succeeds they will have a lot of work to do to rebuild revenues as well as the fan base and confidence in this team. Can it be done? I believe… and I believe the answer is “yes.”

Apr 13

8

April 7, 2013 NHL Commissioner Bettman interview transcribed

Posted by Joyce Clark on April 8, 2013
Posted in City of Glendale | Tagged With: NHL Commissioner Gary Bettman, Phoenix Coyotes, relocation, Seattle, suitors | 1 Comment

On Sunday, April 7, 2013, NHL Commissioner Gary Bettman gave the following interview. I have taken the liberty of transcribing it and then commenting on his answers to the questions posed to him. Here’s the link if you wish to listen and follow the transcription:

http://www.king5.com/sports/NHL-Commissioner-comments-on-Seattle-franchise-201875051.html

Bettman Interview from King5.com by Chris Daniels, April 7, 2013 (3 minutes, 40 seconds)

NHL Commissioner Gary Bettman

Reporter (R) Question 1: Unintelligible

Bettman (B) Answer: “We’re not planning on changing the realignment and we’re not planning on moving Phoenix, as we stand here today.” (Italics and bold mine)

Please note that I have italicized and boldened Mr. Bettman’s last phrase. He could have ended his comment after he said we’re not planning on moving Phoenix but he threw in that last phrase, “as we stand here today.” That does not seem to omit future consideration of moving the team.

R Q 2: Is any decision on Phoenix imminent?

B A: “No, when it becomes imminent we’ll tell you. We apparently aren’t operating on the same time frame that a lot of your colleagues are.”

R Q 3: Well, what time frame are you operating on?

B A 3: “On one that works on getting the project completed in a successful light.”

R Q 4: Do you have multiple…Can you give us an update on Phoenix?

B A 4: “As Bill Daly said, quoting him who was quoting me, this is a work in progress and it remains such and Frank hates that when I use that over and over again. But we’re continuing to work on it and there are a lot of things that are in play.”

In Commissioner Bettman’s answers to Q 2, 3 and 4, I would bet you he said the same things in 2010, 2011 and 2012.

R Q 5: In terms of keeping the team in Glendale or…?

B A 5: “Well, we haven’t been exploring the alternatives.”

What is unsaid is just as relevant as what was said in this response and that is we haven’t been exploring alternatives right now.

R Q 6: You haven’t explored relocation?

B A 6: “We are exploring everything we can to work this out and there seems to be considerable interest. You know, if you go through the history of this, there have been lots of reasons this has taken lots of time. There seems to be now, calm at the moment, a lot more interest than we’ve ever seen.”

It is interesting that this question went unanswered and was meant to direct attention away from relocation. Apparently it was successful because the reporter’s follow-up question is related to the time it has taken.

R Q 7: Why do you think that is…going for a long time?

B A 7: “Because there are a lot of things that happened. Some were with our control, some were beyond our control. Whether or not it was third party intervention, whether or not it was the work stoppage, whether or not it was the deal that went bad for a variety of reasons, the fact of the matter is, there seems to be more interest at this particular point in time than we’ve seen throughout the process.”

R Q 8: Is the city any more cooperative?

B A 8: “Well, I’ve been in regular touch with the mayor and we agreed that when we get a framework lined up then we would come see the city. We don’t want the city to have to expend resources and time getting involved until there’s something concrete to present to them.”

The Commissioner’s response corroborates what has been widely suspected and that is the NHL will select a buyer and bring the deal to Glendale to take it or leave it. The NHL certainly wasn’t this solicitous of the time and resources the city used on a parade of previous suitors.

R Q 9: Could there be some kind of combination of previous suitors?

B A 9: “That would require a lot of speculation and information that might not be constructive to the process.”

R Q 10: I’m coming to you so that I don’t have to speculate…

B A 10: “And I would prefer that we not talk about it because what’s more important is that we get through this process and I think we’ll have a better indication from these meetings this week as to whether we’re getting closer to resolving it.”

The Commissioner is reluctant, as obviously anyone would be at this point, to reveal any of the suitors or their deal points.

R Q 11: Is insurance the main issue this week?

B A 11: “There are lots of issues. I know in your business it’s more interesting for the people that follow you to have specific things to focus on. This doesn’t get done until all of the essential elements get done and so it doesn’t take a focus on any one of the issues.”

R Q 13: Can you tell us when the meetings are and who is meeting?

B A 13: “I think the meetings are either Wednesday or Thursday. NHLPA, IOC and double IHI.

R Q 14: How close are you following the NBA Board of Governors and the potential of the Seattle arena going in?

B A 14: “Just from afar.”

Do we really think so?

R Q 15: Does it affect Phoenix?

B A 15: “Not really. Phoenix is Phoenix. They’re gonna, I assume the NBA Board of Governors will make whatever decision they think is in the best interest of the league and the franchise involved.”

I wouldn’t be commenting on Seattle as a relocation possibility for Phoenix either.

R A 16: Seattle in general. Do you have any thoughts on that as a potential hockey market?

B A 16: “The research I’ve seen tells me that it would be a very strong hockey market. I haven’t looked at it in detail but it’s all anecdotal and third hand and obviously, if there were a team in Seattle it might foster a pretty decent rivalry with a northern neighbor, namely Vancouver.”

Look for a team in Seattle in the future. Whether it turns out to be the Coyotes or another team, only the Commissioner knows and he’s not telling.

——————————— END ————————————

Apr 13

7

Just for fun…

Posted by Joyce Clark on April 7, 2013
Posted in City of Glendale | Tagged With: City of Glendale, Gary Bettman, Phoenix Coyotes | No Comments yet, please leave one

Rumors abound about the Coyotes’ ownership saga. Sightings of potential owners now occur regularly at every home game. Thank goodness, according to the research done by one of our Coyotes’ “thug gang,” Greg Dunaway, average attendance is up by at least 7%. When you go to a game, it looks like a full house to me. That surely warms the heart of any potential owner of the team.

At the last game I had my trusty binoculars in tow (usually I forget to bring them or am too lazy to carry them). I spotted John Kaites in Mike Nealy’s suite and George Gosbee chatting in the lower level. I didn’t see LeBlanc, Hulsizer or Jamison. That doesn’t mean they weren’t there. I simply did not spot them. I also saw Councilmember Sherwood in his new Coyotes jersey with his name and number 13 on the back. He visited Nealy’s suite for a generous helping of snacks and goodies and then swiftly disappeared.

Just for fun I have once again added what is fast becoming the Coyotes’ Wheel of Fortune. If you could spin it wherever the pointer landed would be as good a guess as any as to who the new owner will be. There was an old radio show when I was a kid called “The shadow knows.” In this case, it’s not the shadow, it’s Commissioner Bettman who knows the winner of this contest.

Once the new owner is announced and brought to Glendale for the final act, you can then use this trusty Ouija board to find the answer to the question of: Will a majority of the Glendale City Council award the lease management contract? Right now, a Ouija board will give you a comparable answer to any of the speculators. Have fun!

Apr 13

5

Glendale…will they or won’t they?

Posted by Joyce Clark on April 5, 2013
Posted in Jobing.com arena | Tagged With: Anthony LeBlanc, Beacon Sports, City of Glendale, Darrin Pastor, George Gosbee, Greg Jamison, jobing.com arena, Matthew Hulsizer, Mayor Weiers, Phoenix Coyotes, Vice Mayor Knaack | 3 Comments

Late on Friday, April 4, 2013, Craig Morgan, who covers sports for Fox Sports Arizona among a growing list of other media, did an outstanding job of summarizing the recent Coyotes saga. To read his entire article, please go to http://www.foxsportsarizona.com/nhl/phoenix-coyotes/story/Coyotes-ownership-saga-hits-stretch-run?blockID=889001&feedID=3702.

George Gosbee

Anthony LeBlanc

I have chosen some of the most salient snippets for further commentary. He said, “The group led by George Gosbee and Anthony LeBlanc has already submitted its purchase bid to the NHL, and Darin Pastor’s group submitted the paperwork for its proposal to the league on Friday. Greg Jamison’s group is still working on a proposal, but it is expected that they will submit it by the middle of next week, likely under pressure of an imposed NHL deadline.”

Darrin Pastor

Greg Jamison

The latest rumors say the LeBlanc/Gosbee deal is for 15 years, with no opt-out clause and an option to buy the arena. There is no word on the kind of deal submitted by the Pastor group. That’s odd after his flurry of recent publicity. I am especially gratified to see that Greg Jamison is still a player. I must admit that I hope he prevails. I have met him and talked to him in depth and it is still my belief that this man is a perfect fit for the Coyotes. Morgan offers that Matt Hulsizer may still be in the hunt as well. Maybe…maybe not. Mr. Hulsizer, a successful businessman, married into a family of wealth. They were willing to support him on his first attempt to buy the Coyotes…and why not? A hundred million dollars would have come from the City of Glendale. Yes, the family investment was still healthy but not as much was on the line as the city’s investment under Hulsizer. My guess is that there is no will to continue on the part of the family. I could be wrong for I have proven so in the past but somehow or another, I am willing to write him off.

Mr. Morgan then goes on to say, “What is likely to happen soon is that the NHL will choose an exclusive buyer, then approach Glendale to negotiate the lease agreement. The Glendale City Council hired Beacon Sports Capital in late March to solicit bids from management companies to run the arena, as well as to handle negotiations with any prospective owners.”

Gary Bettman

This confirms my assessment in previous blogs that the League is in the driver’s seat this time. They will choose the buyer and Glendale will either come to terms with that buyer or not. The option of relocation of the team is certainly not dead yet. This council may have thrown good money after bad in hiring Beacon Sports Capital. It appears that Beacon will have no role in the process when the NHL selects the owner. There will be no one to vet. If, however, Glendale cannot or will not come to terms with the newly selected owner, Beacon will then have a role as council will most likely Mayor Weiers’ Plan B with the use of 4 managers for the arena.

In additon, Morgan states, “What that lease agreement will look like is anyone’s guess. Glendale City Councilwoman Yvonne Knaack said recently that the annual fee to the city could “be anywhere from $6 (million) to $10 million on operating, and then maybe another $9 million on debt.”

Councilmember Sherwood publicly recognized a figure of at least $10M to $12M annually for a lease management agreement. Vice Mayor Knaack acknowledged a similar figure as well. She is also correct about the arena construction debt of approximately $9M a year. This is where it gets dicey. Will this council accept a deal that requires a substantial annual payment along with the annual construction debt? Combining the two, the figure will be somewhere in the $20M range annually. But that requires this council to cut expenses elsewhere to absorb the costs of the deal and to continue to build a contingency reserve fund. To date there has been absolutely no will to cut by the new council. In fact, they are considering adding 15 firefighter positions and a new $650K truck and 31 police positions to this budget. They simply cannot do both – manage the annual costs associated with the arena while creating new budgetary expenditures.

Norma Alvarez

We have heard enough from Councilmember Alvarez to know that she wants to pay nothing for the arena and I suspect she thinks there is some group out there that will pay the city for the privilege of managing the arena. Not even her beloved Phoenix Monarch Group was willing to fall for that. If you remember, their base fee was $7M for a limited number of events…read tractor pulls. Nevertheless, she stubbornly holds to that position and has even managed to elicit support from Councilmembers Hugh and Chavira. Councilmembers Martinez and Sherwood recognize the importance of keeping an anchor tenant at the arena for the future of a vibrant Westgate that attracts new development in and around it.

Yvonne Knaack

Jerry Weiers

That leaves two question marks, Vice Mayor Knaack and Mayor Weiers. Vice Mayor Knaack is on the horns of a dilemma. I suspect in her “heart of hearts” she knows that keeping the team as an anchor tenant would be the right choice. But her strongest backers, the fire union, will put tremendous pressure on her if they see their 15 additional firefighter positions and new truck evaporate in this year’s budget. Mayor Weiers, on the other hand, derided the deal the previous council had with Greg Jamison. He should be reminded that Anthony LeBlanc has said publicly that any deal with the city must be similar to the previous deal on the table with Jamison. Weiers is also looking for a deal on the cheap. It will be time for these two people to decide what is more important. Is it more important to send the team packing and leave the legacy of an uncertain future for the arena and Westgate because it’s what their supporters in their previous election now expect of them? Or is it more important to accept that for the sake of Glendale, of Westgate and of West Glendale’s future development potential that sometimes one has to make the difficult and unpopular decision? We will see…soon enough. We all hope that they realize the importance of keeping an anchor tenant at the arena.

I am pleased that this long, painful Coyotes ownership saga is coming to an end. I wish all the potential owners well although I continue to root for Greg Jamison. The Coyotes team has been beleaguered and beaten for too long. They, more than anyone or anything else, have earned certainty about their futures.

Apr 13

2

Heard around the water cooler

Posted by Joyce Clark on April 2, 2013
Posted in Blogs • City Council Actions • City of Glendale • Glendale elected officials • Glendale finances • Jobing.com arena | Tagged With: budget, City of Glendale, elected officials, finances, Phoenix Coyotes | 2 Comments

cit mtg 2 On the evening of April 1, 2013, the City made a public presentation of the state of its budget to the public. If you include myself and the councilmember representing our area there were a total of 5 people in attendance. That’s right. Three citizens and us. How embarrassing for the councilmember. Oh, but that’s OK. His only constituency these days is the fire fighters union.

In terms of city staff, it would be safe to say the citizens were outnumbered at least 3 to 1. There was at least 20-25 staff in attendance. Every director of every department was on hand to answer the flood of citizen questions (not), in addition to 2 of Glendale’s cable channel 11 TV crew filming the non-event. It almost begs the question as to why doesn’t the city ask the general public to RSVP? If a minimum number of citizens respond, the meeting is held. If only 2 or 3 respond, the meeting could be cancelled. After all if the public meeting had been cancelled, it would have only required calls to 3 people.

These staff members are salaried and not paid time and a half for extra duties such as attending this meeting. These salaried personnel, if they so choose, can compensate themselves for the time by coming in to work a little later or taking a longer lunch break. It is an option available to them should they choose to use it. Many of them do not and put in more than a standard 40 hour work week.

Ms. Schurhammer, Executive Director of Finances, made a 15 minute presentation on the city’s budget. She concentrated on the city’s total Operating Budget by Fund and Department and the General Fund Budget by Department. She pointed out that 34% of the city’s entire budget and 63% of the city’s General Fund budget goes to Public Safety. There was virtually a silent scream from all non-public safety staff asking how much more does Public Safety need? We’ll get to that in a minute.

Back in December, 2012, both the Fire and Police departments had their respective budgets balanced and were prepared for a vote of approval from the sitting council at that meeting. However, Vice Mayor Frate made a motion that their budgets be tabled and brought up again when a permanent City Manager was hired. The vote was 6-1 with me being the lone, dissenting vote. That action left their budget departments” doors open just a crack. Now, sensing an opportunity, they are smashing open those doors with a fire truck and tactical vehicle. They sense blood in the water and this new council (led on this issue by Councilmember Chavira, a Phoenix firefighter) is willing to give them everything and anything they want. Chavira will take care of his brothers in Glendale and we can only guess that Phoenix Councilmember Danny Valenzuela (a Glendale firefighter) will take care of his brothers in Phoenix. Sweet, isn’t it? It has a nice, quid pro quo ring to it, doesn’t it? Note that the city does not have a permanent City Manager. Yet he will have to deal with the largesse that this council dispenses.

After Ms. Schurhammer’s presentation, Ms. Julie Watters of the city’s Media and Communications Department, led the meeting by asking if there were any public comments. Mind you, a citizen could not ASK a direct question, only comment. If anyone had a question, they were directed to talk to that specific department director after the meeting. This is a tried and true practice that Glendale has practiced for years and which I have hated for just as long. For you see, if the question is a difficult or uncomfortable one, the answer is made only to the citizen seeking the answer after the meeting. After all, the city wouldn’t want all those citizens hearing that awkward answer to that difficult question. Would it? It’s a divide and conquer strategy that I believe is unfair to the citizens of our community.

What were the water cooler musings? Several sources echoed one another. Much of it, dear reader, is old news for I have blogged about it previously. Nevertheless, here goes:

The Coyotes will be sold this month by the NHL.
The idea of 4 separate arena management contracts (you remember…hockey, entertainment, education and cleaning) still has legs and is not dead.
The general consensus is the Coyotes will be leaving Glendale as the city and the new team owner will not be able to come to mutually satisfactory terms on the arena lease management contract.
Or the other theory is that the team will stay in Glendale briefly (2-5 years) and then relocate.
This new council has no will to make the necessary and needed cuts over the next 4 years and likely will not sunset the temporary sales tax increase in 2017.

All departments will struggle to come up with adequate funding to support the hosting of the 2015 Super Bowl in Glendale. Further diminishment of citizen services may be the only way to fund the costs.

Mar 13

22

Goldwater Institute: You may do what it says but not what it does

Posted by Joyce Clark on March 22, 2013
Posted in Blogs • City of Glendale • Glendale finances • Jobing.com arena | Tagged With: Arizona Working Families, Center for Media and Democracy, Goldwater Institute, Jobing.com, Phoenix Coyotes | 5 Comments

Courtesy of
Goldwater Institute

On March 14, 2013 the Center for Media and Democracy in conjunction with Arizona Working Families issued A Reporter’s Guide to the Goldwater Institute: What Citizens, Policymakers and Reporters Should Know. It can be found at this site: http://www.prwatch.org/news/2013/03/12021/reporters-guide-goldwater-institute.

While I was serving on Glendale’s city council there were several lawsuits filed by the Goldwater Institute (GWI) against the city. The first dated back to June of 2009 and contended that the city was refusing to release documents relating to its negotiations with various entities wishing to purchase the Coyotes and to secure a lease management agreement. GWI felt every scrap of paper should be a public document. The final agreement was that the city would release all documents it felt would not harm its negotiating position and if that should be the case, a judge, in camera, would review them and make a final decision.

Then about two years later, in March of 2011, Goldwater having reviewed more than 1,000 of the city’s documents as a result of the previous court decision, filed suit to subvert the Hulsizer deal to buy the Coyotes. It contended that the city was offering a subsidy in violation of Arizona’s Gift Clause statute. There was never a decision in this case as the city and Hulsizer could not finalize a deal.

When this report was issued I was eager to read its findings. I suspect that the practices of GWI are not so different from other public policy non-profits whether they are liberal or conservative. These types of non-profits are often shielded by federal government regulations making it difficult to obtain a complete and accurate picture of their financial dealings.

I find that to be ironic. The same organization that sued the City of Glendale for a lack of transparency is habitually not so transparent itself. It seems they don’t mind letting the public know about some, not all, of their sources of funding but they certainly don’t want you to know too much about how they get their money or spend it.

Another irony is GWI’s persistent attack on only one sport venue in the state – Glendale’s Jobing.com Arena and its use by the Coyotes. Lord knows, there have been sweetheart deals aplenty with other sports venues. Yet Goldwater never raised an eyebrow. I have often wondered if the close relationship of some board members with the baseball industry was a motivator. Perhaps, in the minds of some, there are too many sports teams all competing for the same public discretionary dollar. Taking out a major sports team could benefit the remaining teams. When a team is weak, as the Coyotes have been for multiple years, that makes it a perfect target for elimination.

Briefly the findings of this report do highlight some questionable practices:

The Goldwater Institute is a member of the American Legislative Exchange Council (ALEC). ALEC is funded by corporations and its sole purpose is to craft and advocate for bills favorable to big business interests exclusively. The relationship between these two organizations appears to be very, very close. Often the very issues that GWI is advocating for coincidentally happen to be part of ALEC’s agenda.

Darcy Olsen
Courtesy of
Goldwater Institute

Clint Bolick
Courtesy of
Goldwater Institute

Despite a very modest growth in GWI’s income it substantially raised its top executive’s salaries disproportionately to that growth in revenue. Darcy Olson’s Executive Director salary jumped from $180,000 to $268,000 by 2011; Clink Bolick’s Director of Litigation salary went from $126,000 in 2007 to $300,000 by 2011.

Up to $1.9M has been approved as a loan by the GWI board to one of its board members, Norman McClelland, a GWI founder and past president, for his private, for-profit company, Shamrock Farm Co Investing.

Goldwater claimed to the IRS in 2010 that it spent $0 on grassroots or direct lobbying. Yet is has two registered lobbyists, Starlee Rhoades, Vice President, and Lucy Caldwell, Communications Director. Gallagher & Kennedy, a Public Affairs firm, is representing GWI as an active lobbyist this year.

GWI does not publicly disclose its largest donors, although most public policy non-profits do. A majority of GWI’s funding comes from and its largest donors happen to be out-of-state foundations with specialized agendas.

Barry Goldwater

Barry Goldwater became the Institute’s namesake. Recently Susan Goldwater expressed public concerns in the media about the GWI by saying, “(W)hat he didn’t like was seeing it turn into a special interest, big-business lobbying group.” I suspect Barry Goldwater is rolling in his grave as he sees what the Institute has morphed into.

Perhaps this “big-business lobbying group” should add as an agenda item how it can advance the cause of big-business sports teams and their venues. After all, according to GWI, all big-business is good business.

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